A buzzword that refers to a retails firm's comparable same store sales. This metric compares the degree of revenue growth/decline that a firm's stores achieve relative to their sales in previous years. Typically, this metric is not used to assess stores that have been operating for less than a full year.
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For example, if XYZ Corp.'s comps for May 2007 are up 10%, this means that each of XYZ's stores, on average, earned 10% more revenue compared to itself during May 2006.
Analysts typically like to hear that a firm's comps are rising each period because this is a good indication that the firm's consumers are willing to pay more for goods compared to the previous period and/or willing to come to the store more often (and spend more or less the same amount). The key is that the firm is seeing an increase in revenue without resorting to opening new stores.
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If used properly, this ratio can give you insight into a company's productivity and financial health. Doing More With Less: The Sales-Per-Employee Ratio
Take a look at how this effective ratio can be influenced by certain critical factors. Use Price-To-Sales Ratios To Value Stocks
